REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 076126/2023
REPORTABLE : NO (1)
(2)
(3) OF INTEREST TO OTHER JUDGES: NO
REVISED: NO ~-
13 MAY 2025
DATE
In the matter between:
RAVAL INDUSTRIAL (PTY) LTD
and
HAROON ABDUL MAGID KHAN
DOMINGO, AJ
Introduction JUDGMENT Applicant
Respondent
[1] This is an application brought by the applicant for the sequestration of the estate
of the respondent into the hands of the Master of this Honourable Court.
[2] The applicant relied thereon that it is a creditor of the respondent as
contemplated in section 9 of the Insolvency Act of 1936 ("Insolvency Act"), for a
liquidated amount in the excess of R90 million.
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[3] The applicant contended that the relief sought is based thereon that the
respondent is actually insolvent. He has also admitted that he is unable to pay
the amount owing to the applicant. Further and/or in the alternative the applicant
relied thereon that the respondent also indicated that he is willing to sign an
acknowledgement of debt and admitted being indebted to the applicant.
[4] On the day of the hearing, the respondent appeared in court without legal
representation and informed the court that he ha d elected to represent himself .
The respondent submitted that if this application was left unopposed, it would
have adverse consequences on his future as well as that of his family.
[5] The respondent contended that the applicant had failed to make out a prima facie
case that the resp ondent is a debtor of the applicant as contemplated in section
9 of the Insolvency Act, for a liquidated amount in excess of R90 million. The
respondent denied having admitted that he is unable to pay the sum of R90
million a s alleged by the applicant and neither was there any willingness
indicated by the respondent to sign an acknowledgement of debt for R90 million.
Issues
[6] The issues to be determined in this matter are as follows:
6.1 Whether the late filing of the respondent’s answering affidavit should be
condoned.
6.2 Whether the application meets the requirements for a provisional
sequestration.
Point in limine
[7] The respondent raised the issue of the condonation of the late filing of the
applicant’s answering affidavit as a point in limine . The applicant contended that
the respondent had failed to file his answering affidavit within the prescribed
period and submitted that the issue of condonation should be dealt with first.
[8] The respondent ha d not filed a condonation application but had briefly in his
answering affidavit dealt with the issue of condonation. The applicant contended
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that no proper case had been made out for the late fil ing of the answering
affidavit, and that condonation for the late filing should be refused. Furthermore,
the applicant contended that the respondent had failed to set out a valid defence
against the requested relief in the answering affidavit.
[9] In the Grootboom v National Prosecuting Authority and Another1 the court state d:
“In this Court the test for determining whether condonation should be granted or refused
is in the interest of justice. If it is in the interest s of justice that cond onation be granted,
it will be granted. If it is not in the in terests of justice to do so, it will not be granted. The
factors that are taken into account in that inquiry will include :
(a) the length of the delay;
(b) the explanation for, or cause for, the delay;
(c) the prospects of success for the party seeking condonation;
(d) the importance of the issue(s) that the matter raises;
(e) the prejudice to the other party or parties; and
(f) the effect of the delay on the administration of justice.
[10] This sequestration application was served on the respondent on 5 September
2023. The respondent served a notice to oppose on 21 September 2023 . The
notice of final enrolment was served on the respondent’s attorney on 24 January
2024 and the matter was enrolled for hearing on 16 February 2024. It is submitted
by the applicant that the respondent’s erstwhile attorney only sent an electronic
copy of the respondent’s answering affidavit to the applicant’s attorney on 11
February 2024 (a Sunday), less than a wee k before the hearing of the matter on
the unopposed motion court roll . The late service of the answering affidavit of the
respondent caused that the matter had to be postponed for hearing on the
opposed motion court roll.
[11] The applicant contended that the respondent’s failure to file a notice of intention
to oppose timeously, and thereafter failing to file an answering affidavit , which
1 (C696/08) ZALCCT 15 (18 December 2009) at para 51.
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was due in October 2023 clearly constit uted delaying tactics, and an abuse of
the court’s process.
[12] The respondent submitted that his answering affidavit was filed late due to a
break down in his mental and health well -being. The respondent submitted that
he was arrested on the 22 September 202 2 and obtained bail on 10 October
2022; he was arrested for a second time on 1 December 2022 and obtained bail
in 9 December 2022. The poor condition and lack of halal food at the prison
negatively impacted on his health and mental wellness. The respondent
contended that the multitude of civil and criminal action s instituted against him
by the applicant added to his stress, anxiety, fear, mental well -being and hea lth.
The respondent adduced in court that due to his faith he had not sought the
services of a mental health practitioner and therefore could not provide any proof
of his mental well -being. The resp ondent explained that in his faith mental well -
being is dealt with through spiritual means rather than medical western methods.
During this challenging time the respondent submitted he was not able to make
sound judgments.
[13] Despite the late filing of the respondent’s answering affidavit, the applicant has
however filed a replying affidavit ex abundante cautela, which the applicant
submitted it would rely on insofar as the court may decide to allow the answering
affidavit despite the lateness thereof and the lack of proper explanation.
[14] In avoiding an overly technical approac h in determining whether to grant the
condonation , I am reminded of the dictum in the case of Louw v Grobler and
Another2 which is often cited as th e “universal compass in cases in which court
orders, rules and process are abused, manipulated and not observed ”3; the
dictum is as follows:
“The purpose of the uniform court rules is to regulate the litigation process, procedure
and the exchange of pleadings. The entire process of litigation has to be driven
according to the rules. The rules set the parameters within the course of litigation has to
proceed. The rules of engagement, must, therefore, be obeyed by litigants. However,
2 (3074/2016) [2016] ZAFSHC 206 (15 December 2016) at para 18.
3 Wolhunter N.O.and Others v Mtetwa Investments (Pty) Ltd (4542/2023; 4543/2023) [2024]
ZAFSHC 98 (4 April 2024).
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dogmatically rigid adherence to the uniform court rules is as distasteful as their flagrant
disregard by the litigants. Dogmatic adherence, just like flagrant violations, defeats the
purpose for which the court rules were made. The prime purpose of the court rules is to
oil the wheels of justice in order to expedite the resolution of disputes. Quibbling about
trivial deviations from the court rules retards instead of enhancing the civil justice system.
The court rules are not an end in themselves. ”
[15] While I am mindful of the almost four month delay in f iling of the answering
affidavit; in the pursuit of a just outcome in this matter, weighing up the interest
of both parties, and taking into account the nature of this matter , I am of the view
that granting the condonation will not severely prejudice the applicant . The
applicant has filed a replying affidavit and filed head s of argument taking
cognisance of the submission s made in the respondent’s answering affidavit.
Thus, i n the premises, having read the papers filed on record and having heard
the applicant’s counsel and the respondent himself, in the interest of justi ce, I
grant the condonation of the late filing of the answering affidavit.
Background
[16] The applicant’s main business involves the manufacturing of ceramic tiles. The
applicant uses large quantities of coal in its business to bake tiles in firing glass.
[17] It is submitted by the applicant that the respondent ha d been employed by the
applicant since 2010, and the respondent was inter alia responsible for sourcing
and procuring coal and other items f rom suppliers, and for preparing payment
requisitions for payment to coal suppliers, as well as to other suppliers who
supplied other good s to the applicant. The respondent was also responsible for
dealing with environmental consultants and for receiving invoices from such
suppliers and requisitioning payments from the applicant in respect thereof.
[18] It is submitted by the respondent that he commenced employment with the
applicant from 1 December 2012 . The respondent in his answering affidavit
stated that he wa s initially employed as an assistant general manager of the
applicant with the primary responsibility of assisting the deponent of the
applicant’s founding affidavit, a director of the appl icant, with all the health and
safety requirements and obligations in connection with the applicant’s business
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operations. Thereafter, the respondent’s responsibilities in creased over time to
the sourcing, procuring, testing and p urchasing of all coal requirements for the
applicant’s manufacturing operations in accordance with the specifications of its
manufacturing plant and equipment.
[19] The applicant stated that it trusted the respondent completely with the execution
of his duties. The applicant further submitted that the respondent used and
abused his position of trust b y defrauding and stealing from the applicant and
misappropriating vast amounts of money from the applicant. The respondent
primarily followed a modus operandi whereby he fabricated fictitious invoices. On
such invoices it is alleged by the applicant that the respondent included higher
amounts than the amounts on the real i nvoices of suppliers, and he also changed
the real banking details of suppliers and replaced it with banking details of bank
accounts of inter alia his family members.
[20] The applicant further submitted that the respondent then signed and submitted
payment requisitions for the amounts of fictitious invoices (which were higher
than the amounts of the invoices actually received from suppliers ) as if same
were real invoices from suppliers , and so misrepresented the real position to the
applicant, causing the applicant to effect payment of the inflated amounts of the
fictitious invoices which were received in bank accounts of persons nominated
by the respondent, such as his wife , son, daughter -in-law and a company.
[21] The applicant submitted that when it obtained knowledge of the respondent’s
unlawful conduct, it proceed ed to apply for and successfully obtained various
interim and final interdicts, to inter alia freeze accounts of family members of the
respondent which were mentioned on fraudulent invoices, and to prohi bit the
disposal of assets by the respondent and his family members. Copies of these
interdicts were filed on record to the applicant’s founding affidavit.
[22] The applicant also laid criminal charges against the respondent. It is submitted
by the applicant that the respondent has made out no case that the existence of
criminal proceedings should prevent the court from exercising its discretion to
grant a provision al sequestration.
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[23] The applicant also informed the court that before this application was file d, the
applicant issued a summon s in this court against the respondent and six other
defendants in November 2022, claiming the amounts mentioned in this
application, on the same basis as set out in this application . As at the date of this
application the applicant submitted that it had already through investigation
established that an amount of at least R90 219 465.99 was involved, which the
applicant unlawfully invoiced and cause un lawfully to be paid by the applicant.
[24] In this matter, the applicant presented proof of various monetary claims against
the respondent. The nature, calculation and compilation thereof were set out in
detail in the applicant’s founding affidavit. I am in agreement with the a pplicant
that these amounts were not challenge d by the respondent by way of different
calculations or proof to the contrary and were in essence met by a blanket denial
by the respondent.
Respondent’s defence
[25] The respondent has responded to the allegations regarding the compilation and
calculation of the amount alleged owing with a blanket denial and repeatedly
referred to the contents of paragraph 17.1 and 17.2 of the plea pending in the
action against him and six other s. The r espondent submitted that his stands by
his defence set out in the those paragraphs in his plea in that pending action.
[26] It is submitted by the applicant that in such pa ragraph s in the plea in the pending
action , the respondent has inter alia alleged and admitted the following:
26.1 The respondent ha d admitted that he participated in a scheme devised
to fabricate inflated and fictitious inv oices which was then presented to
the applicant for payment.
26.2 The accounts of his family members and entities under his control were
then used to channel funds from the applicant to those funds from the
applicant to those accounts.
26.3 The true suppliers of coal and/or other items were then paid from those
nominated accounts.
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26.4 The respondent then distributed the difference between the value of the
fictitious invoices and the legitimate invoices.
26.5 He withheld/received 20% of the proceed of the fraudulent scheme as
compensation .
[27] The respondent further contended that the de ponent to the founding affidavit
allegedly approached him to conduct the unlawful scheme in terms whereof the
respondent acted as described above. In essence the respondent admitted that
he did act unlawfully and generated fictitious invoices as mentioned above , but
said that he paid (part of) the inflated amounts received in the various accounts
(of inter alia his family members as aforesaid) to the deponent to the founding
affidavit, in cash, whilst 20% of such unlawfully acquired proceeds was taken for
himself as it was allegedly so agreed between him and the applicant’s deponent .
[28] The applicant averred that the respondent’s allegations regarding the de ponent
of the applicant’s alleged involvement should be rejected as a mere belated and
unsupported conjecture, and that his version in any event does not provide him
with a defence against the applicant’s claims.
[29] I am in agreement with the applicant, that the respondent’s allegations clearly
show that, on his own version that he admits generating false invoices and
requisitioning the applicant with inflated amounts. Even on his own version, the
respondent would at least have unlawfully , as submitted by the applicant,
amassed an amount of at least about R18 million unlawfully from payments made
by and to the detriment of the applicant (on the respondent’s 20% version).
[30] The allegations that the deponent to the founding affidavit was involved was
denied by the deponent . It is submitted by the applicant that such allegations
should be rejected inter alia in view of the following:
30.1 The respondent had failed to completely to take the court into his
confidence and explain the nature and extent of his own involvement
with the scheme, the amounts involved, and how it was dealt with.
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30.2 Why would the applicant or its shareholders act to their own detriment ?
The respondent’s fraudulent invoicing would have had no benefit to the
applicant or its shareholder s.
30.3 The fact that the respondent misappropriated mon ies, on his own
version, also appea rs from the transcript of a meeting that took place on
31 August 2022. The transcript of this meeting was filed on record. The
respondent never mentioned the alleged involvement of of the
applicant’s deponent at that meeting .
30.4 The respondent has not presented any proof of the alleged agreement
relied on by him, no r any particulars thereof . It is trite that a party relying
on an agreement bears the onus to prove the agreement and the terms
thereof.4 The respondent had failed to do so. The existence of the
alleged agreement is vehemently denied by the applicant’s deponent,
and who presented evidence, which support on the probabilities that the
respondent’s allegations must be rejected .
[31] In the premises, I am in agreement with the applicant that the respondent failed
to present a valid defence against the applicant’s application.5 Furthermore, I am
in agreement with the applicant's submission that there exists no real dispute of
fact regarding any material aspect in this application, as the respondent has
admitted his participation in the unlawful conduct . I am also of the view that the
respondent has not challenged the applicant’s evidence with facts and evidence
to the contrary and thus has presented a very weak defenc e.
Requirements for provision sequestration
[32] Section 10 of the Insolvency Act read as follows:
“If the court to which the petition for the sequestration of the estate of the debtor has
been presented is of the opinion that prima facie –
4 Badenhorst v Van Rensburg 1985 (2) SA 321 (T) at 335.
5 See Reynolds v Mecklenberg (Pty) Ltd 1996 (1) SA 75 (W) at 80F-81E.
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(a) The petitioning creditor has established against the debtor a claim such as
mentioned in subsection (1) of section nine; and
(b) There is a reason to believe that it will be to the advantage of creditors of the debtor
if his estate is sequestrated, it may make an order sequestrating the estate of the
debtor provisionally.”
[33] In Provincial Building Society of South Africa v Du Bois6 it was held that section
10 of the Insolvency Act determines that a provisional sequestration order should
be made in every case in which a court is satisfied that a prima facie case has
been made out.
[34] In First Rand Bank Limited v Evans7 it was held that if the conditions for a
provisional sequestration order are satisfied , “then in the absence of special
circumstances, the court should ordinarily grant the order.” It is thus for the
respondent to establish such circumstances that warrant the exercise of the
court’s discretion in his favour. I am in agreement with the applicant ’s submission
that no special circumstances were established that would inform the court in the
exercise of its discretion to not grant the provisional sequestration order .
Jurisdiction
[35] It is common cause that the respondent is domiciled within the court’s jurisdiction
and has immovable property within such area of jurisdiction. Thus, I find that
section 149(1) of the Insolvency Act has been complied with.
Locus Standi
[36] I am in agreement with the applicant that it has shown that it is a creditor of the
respondent, at least in the amount of R100.00 as contemplated in section 9(1) of
the Insolvency Act.
[37] It is submitted by the applicant that it appears from the transcript of the meeting
of 31 August 2022 that the respondent has admitted being indebted to the
applicant saying that he can only make down payments. Having read the
6 1966 (3) SA 76 (W).
7 2011 (4) SA 597 (KZD) at para 27.
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transcript I am of the view that one can infer that the respondent has admitted to
being indebted to the applicant.
[38] I am in agreement with the applicant’s submission that the applicant’s claims are
fixed amounts of money and are li quidated.8 That even on the applicant’s own
version, the amount that he would have retained is at least equal to 20% of
monies that were fraudulently procured from the applicant.
[39] The respondent did not dispute neither did he present any evidence to show that
he did not receive the alleged amounts of money or that he did not defraud the
applicant. I am of the view that in the absence of evidence to the contrary , and
in view of the respondent’s admissions and his participation in the unlawful
appropriation of monies from the applicant, i n the premises I am satisfied that the
applicant is a creditor of the respondent, at least in the amount of R100.00.
Security
[40] It is common cause that the applicant holds no security for its claim.
Insolvency
[41] In the Provincial Building Society of South Africa9 case it was held that in an
application for provisional sequestration an applicant is only called upon, in terms
of section 10 of the Insolvency Act, to establish a prima facie case for insolvency.
[42] Applicant’s counsel directed the court to the case of Ullman Sails (Pty) Ltd and
Others v Jannie Reuvers Sails (Pty) Ltd and other Related ma tters10 where the
court stated that an “applicant relying on actual insolvency is not required to
adduce evidence that would enable the respondent’s assets and liabilities to be
finitely determined in rands and cents”, and an applicant may discharge the onus
of establishing a prima facie case by way of sufficient evidence to justify the
inference at least as a matter of probability, that the respondent is insolvent.
Evidence (proof) of factual insolvency need not be direct. It is sufficient if facts
8 See for example Irvin & Johnson Ltd v Basson 1977 (3) SA 1067 (T) at 1072B/C -F; Kleynhans
v Van der Westhuizen N.O. 1970 (2) SA 742 (A) at 749; Mars, the Law of Insolvency (10th ed) at
p120.
9 Supra note 6 at 78 A -E.
10 [2002] 3 AII SA 290 (WCC) at para 48.
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are provided from which the inference of insolvency is fairly and probably
deductible.11
[43] Where such a prima facie case has been established, the onus is on the
respondent to rebut the inference by showing that he has sufficient assets to be
able to settle his liabilities .12 I am in agreement with the applicant that the
respondent has not done so ; he has provided no particulars of his assets and
liabilities to show the contrary.
[44] The evidence re garding the respondent’s assets and financial affairs of the
respondent, w hich were made available to the applicant, was presented in the
founding affidavit of the applicant. It showed that the respondent owned, or was
the co -owner, of various immovable properties and a luxury motor vehicle worth
an estimated value of R1.2 million, and the properties jointly owned by the
respondent were valued at approximately between R6 -7 million.
[45] The respondent did not deny that he has such assets, and he has not presented
any evidence to show that he is in fact actually solvent, with or without the debt
claimed by the applicant. Furthermore, the respondent has presented no
evidence to refute the correctness of the amounts claimed by the applicant. It is
therefore submitted by the applicant, that the applicant ’s version should be
accepted.
[46] In the premises, I am of the view that the applicant has adduced sufficient
evidence to at least make out a prima facie case for insolvency of the respondent
in view of the amounts of the applicant’s claims and the assets of the respondent .
I am therefore in agreement with the applicant’s submissions that the
considerable amount of the debt which the respondent owes to the applicant, his
admission mentioned by the applicant, and the fact that he asked for time to pay,
in itself constitutes presumptive proof of the respondent’s insolvency.
Advantage to creditors
11 Mars supra note 8 at 150; see also Fedco Cape (Pty) Ltd v Meyer 1988 (4) SA 207 (E).
12 Supra.
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[47] It is submitted by the applicant that unlike in the case of voluntary surrender, in
an application for compulsory sequestration, advantage to creditors need not be
established, but only that there is reason to believe that sequestration will be to
the creditors advantage .
[48] The applicant directed the court to the case of Meskin & Co v Friedman13 where
the court in considering the meaning of “reason to believe”,stated:
“The phrase ‘reason to believe ’, is used as it is in both these sections, indicates that it is
not necessary, either at the first or at the final hearing, for the creditor to induce in the
mind of the court a positive view that sequestration will be to the financial advantage of
creditors. At the final hearing, though the court must be ‘satisfied ’, it is not to be satisfied
that sequestration will be to the advantage of creditors, but on ly that there is reason to
believe that it will be so. ”14
[49] Furthermore, the standard of proof differs in respect of a provisional and a final
sequestration orde r. In London Estates (Pty) Ltd v Nair15 the court held:
“[T]he standard of proof differs in respect of a provisional and final order (cf. Sacks Morris
(Pty) Ltd v Smith, 1951 (3) at p.170). This must relate to the proof of the facts giving rise
to the belief - not the degree of conviction the belief endangers. In both cases the facts
must show that there is a reasonable prospect – that some pecuniary likelihood, but a
prospect which is not too remo te – that some pecuniary benefit will result to creditors,
But in the case of a provisional order there need only be prima facie proof of those facts;
in the case of a final order the Court must be satisfied that those facts exist, presumably
on a balance of probabilities.”
[50] It is submitted by the applicant that there is indeed “reason to believe” that it will
be to the advantage of creditors of the respondent if his estate is provisionally
sequestrated.
[51] It is submitted by the applicant that there are reasonable grounds for concluding
that, upon a proper investigation of the respondent’s affairs, a trustee may
discover (or recover) assets which might be realised or recouped for the benefit
13 1948 (2) SA 555 (W) at 558.
14 See also Stratford and Others v Investec Bank Ltd and Others 2015 (3) SA 1 (CC) at para 45.
15 1957 (3) SA 591 (N) at 593.
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of creditors.16 It is further submitted by the applicant that the provisional
sequestration of the respondent’s estate would allow for the appointment of a
trustee to investigate the respondent’s affairs, and in particular to determine fully
and precisely the nature and extent of the respondent’s assets and liabilities,
which he has has failed to divulge. The applicant averred that it is imperative that
a trustee be appointed to take control of the respondent’s assets which fall in his
estate, to ensure that same are safeguarded for the benefit of the respondent’s
creditors.
[52] In the premises, I am satisfied that the applicant has made out a case that the
respondent does have at least some valuable assets which can benefit creditors,
which if liquidated, could result in an advantage to the respondent’s creditors.
Security for costs
[53] The applicant has submitted that a certificate in terms of section 9(3) of the
Insolvency Act has been procured.
Service of the application
[54] It has been submitted by the applicant that the application has been served on
the necessary parties , and it will further be served insofar a s the court may
decide to grant the provisional sequestration order.
Conclusion
[55] In the premises, taking into account the totality of evidence , the oral submission s
made by the applicant’s counsel and the respondent, the applicant’s relief sought
for a provisional sequestration is hereby granted.
Order
[56] In the circumstances, I hereby make the following orde r:
56.1 The estate of HAROON ABDUL MAGID KHAN, (“the
Respondent ”), is placed under provisional sequestration in
16 Dunlop Tyres (Pty) Ltd v Brewitt 1999 (2) SA 580 (W) at 583 D -E.
the hands of the Master of the High Court, Gauteng
Division, Pretoria.
56.2 The Respondent is called upon to advance reasons, if any,
why the Court should not order final sequestration of the
said estate as soon as the matter may be heard.
56.3 A copy of this order must be served on the Respondent.
56.4 A copy of this application and the provisional court order
must further be served on:
56.4.1 any registered trade union that as far as the
Sheriff can reasonably ascertain represented any
of the employees of the Respondent;
56.4.2 the Respondent 's employees, if any, by affixing a
copy of the application and provisional court
order to any notice board to which the employees
have access inside the Respondent 's premises,
or if there is no access to the premises, by affixing
a copy to the front gate, where applicable , failing
which, to the front door of the premises from
which the Respondent conducts any business;
56.4.3 the South African Revenue Service;
56.4.4 the Master of the High Court, Pretoria.
56.5 The costs of this application, on an attorney and client
scale, to be costs in the administration of the insolvent
estate of the Respondent. ~
W DOMINGO
ACTING JUDGE OF THE HIGH COURT
PRETORIA
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16
Delivered: This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to the parties’ legal
representatives by email and by uploading it to the electronic f ile of this matter on
CaseLines. This matter was heard in open court on the 12 February 2025. The date
for hand down is deemed to be 13 May 2025.
APPEARANCES
For the Applicant : ADVOCATE JS STONE SC instructed by
GROSSKOPF ATTORNEYS, MR R LOURENS
For the Respondent: MR H. A.M KHAN (self representation/appearance )
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